Even though we are in the midst of the U.S. growing season, market attention is starting to focus more on the crops that may be planted in South America this year.
Nearly all indications currently point toward an increase in plantings in both Brazil and Argentina. Sources in Brazil already claim they will plant nearly 4% more soybean acres this year than last. The primary reason for this is the currency spread between the Brazilian real and the U.S. dollar.
All commodity trade around the globe is based off the U.S. dollar, so when the dollar rallies, their commodities are worth more. The real dropped to record low values, while the U.S. dollar rallied to record highs, which led to record sales of the crop that was just harvested.
Producers in Brazil were also actively selling new-crop bushels to capture record values on that crop and will encourage them to plant more acres.
Not only are farmers in Brazil expected to seed more soybean acres but also use higher quality inputs. Farmers in Brazil...
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